In case you didn’t know, Harvard and Yale have massive endowments—so colossal, in fact, they rival small hedge funds. Because Ivy League schools enjoy cushy federal grants and tax breaks, we would presume they do a responsible job directing that money towards scholarships and research. Not necessarily. 

In 2003, the company that manages Harvard’s endowment paid its five highest employees a combined 100 million dollars a year. The school also regularly shells out massive amounts of money on luxury facilities and amenities.  According to Harvard Magazine, the University has “launched a $1-billion-plus, multi-year plan to renovate 12 undergraduate houses.” 

What’s more: The majority of students at Harvard already come from America’s wealthiest families. According to an article published in The Crimson, 45% of Harvard undergraduates come from families with incomes above $200,000, which places them in the top 3.8 percent of American households. Not to mention only 4 percent of Harvard undergrads come from the bottom quintile of U.S. incomes. 

Perhaps what is most troubling is the discrepancy between what elite institutions are capable of and how they operate in practice. Just 1% of the massive Harvard endowment could effectively cover the tuition of every student matriculated at the school. As Annie Lowrey of New York Magazine recently reported,  “If (Harvard) wanted to maximize its $32 billion worth of utility, it could, say, admit more students, especially poor ones, reduce its focus on property development, and double down on its focus on research, which currently makes up $800 million of its $4.2 billion in annual operating expenses.”

Ironically, some schools with relatively smaller endowments like Vassar and Emory do a significantly better job at hunting for and helping low-income students afford an elite education.  At these schools, 22 percent of undergraduates in 2010-11 received federal Pell Grants, which typically go to students whose families earn less than $30,000 a year. In fact, a student at Vassar is three times more likely to receive a need-based Pell Grant than one at Washington University in St. Louis, though their endowments are comparable. 

Catharine Bond Hill, president of Vassar, calls out these schools for not following through with their social responsibility, “We receive public support through federal grants, state grants, our tax exemptions, so I think we have the same duty,” she said. “And if young people don’t have an equal shot at getting a great education, we’re going to create a society we’re not very happy with.”